If only …

Is your money mind set trapping you or setting you free?

It turns out that we all have our money minds set at a very early age and once these minds are set it becomes very hard and sometimes impossible to change our behaviour towards money unless we are prepared to dig deep and do a little soul searching.

Here, BpH Partner Simon Brown looks at how our attitude to and relationship with money is wired into our subconscious before we realise it and how generational influences can hugely affect our financial decision making, making us richer or poorer in spirit and in pocket.

Understanding people before numbers

As financial lifestyle planners, we place a huge importance in discovering what it is that you really want to do with your life. I also spend time looking at different types of personalities so that I can work out the best way to communicate and then help plan finance to achieve life time goals.

There is absolutely no point in advising you to plan your money in a certain way if it’s at odds with your money mindset. The last words we want you to use as you reach retirement and later life are those ‘if only’ ones.

Money habits

The US is way ahead of the UK in terms of research and books written in this area. Two books that have really struck a chord with me are ‘Wired for Wealth’ by two learned doctors Brad and Ted Klontz and Certified Financial Planner, Rick Kahler; and ‘It’s Not About the Money’ by Brent Kessel, Financial Planner and Creator of The Yoga of Money. Brent Kessel groups all of our unique personalities into 8 financial archetypes. As you read through, see if you can spot which personality traits may match your own.

There is probably one more.

The Workaholic. “I work hard to provide for my family. I work so hard for my family I hardly see them and when I do I am pre-occupied with work which affects my relationships.” It’s also interesting to see how opposites attract such as The Pleasure Seeker and The Saver. This can be a source of friction in relationships.

Money scripts

Having outlined the eight financial archetypes, Brent Kessel then takes us back to early childhood with one chapter heading suggesting “a four-year old runs your financial life”. Many psychologists believe that this is when our subconscious identity is formed and that this product of childhood holds 90% of the power to control our adult decisions.

So, our money mindsets turn into money scripts and it’s these scripts that we are programmed unconsciously to play our lives out to.

The generation game

Now, turning to ‘Wired for Wealth’ by father and son, Ted and Brad Klontz, they look at how our money scripts are formed again in our unconscious mind by the actions of our great grandparents, grandparents and parents as they pass down their attitudes towards money.

For instance in one family example, a father takes advantage of other people’s misfortune to build wealth buying up property and land as others defaulted, amassing a huge fortune for his family and himself.

When the father was ready to pass on this wealth, his three children behaved in different ways.

  1. The eldest son took on the wealth creation mantle and built more wealth not necessarily in the best interest of others.
  2. The middle son wanted nothing to do with it and refused to take any of it.
  3. The youngest daughter married wealth into wealth and used all of her time in the pursuit of helping others and charitable giving.

Extreme beliefs can sometimes lead to extreme behaviours. A child watching overspending and its consequences, may well do the opposite and become an under-spender and a hoarder. Just as a desire to give your children what you never had can lead to some irresponsible decisions in your children’s financial lives.

Changing your money mindset

It’s clear from research and the work I do that our money mindset can trap us, almost unwittingly and cause a great deal of stress in our relationships with family members, partners and sometimes friends.

The examples are endless:

  • The promise of money to children to manipulate and control them
  • Locked into a career you hate driven by an endless desire to make money
  • Spending too much, saving too little
  • Saving too much, spending too little.

The trick is to unwire your money labyrinth

It takes a great deal of courage to unpick your relationship with money and sometimes it can be an uncomfortable journey. But, once you have done it, the results can be liberating and give you that true sense of financial freedom we all strive for.

If you can identify a pattern of behaviour in your own family and yourself you will gain the opportunity to have a more balanced relationship with money yourself. One from which you can create a healthier money legacy for your own children and grandchildren.

Who is running your money show right now?

Brent Kessel encourages us to let the young child inside us speak. Not the experienced adult you have grown in to, but you as the little boy or girl who throws a tantrum when you don’t get your own way.

Try to answer these questions in four-year-old language:

  1. I will feel safe if …
  2. If only I could have … Then I’d be happy.
  3. What I want more than anything is …

If you can find answers to these questions, you will have an idea of what kind of life you really want, one with no financial or psychological constraints.

This knowledge is the beginning of a life plan, one that you can then start to match with the money you have or need to generate.

If any of the words in this article strike a chord with you and you would like to explore them in more detail please do send me an email or give me a call.

We don’t want to hear you saying “If only …” in a few years’ time.

01582 461122